Hey Bill,
The difference between TA_USER and TA_SYSTEM is only where the activation files are stored (user wide or system wide). In both cases TurboActivate uses hardware-locked licensing.
In other words, UserA and UserB will both be able to activate on that same computer because the "computer fingerprint" is the same (because it's the same computer). Now if the UserA and UserB are on 2 separate computers then everything will function as you expect.
Now, if you want to limit the number of instances of your app that can be run on a computer then you can do that with a floating license. TurboFloat (our floating license product) will be out soon and will accomplish that.
Does that help?